ABC Challenges $319M ‘Millionaire’ Verdict

PASADENA, Calif. (CN) – ABC urged the 9th Circuit to overturn an unprecedented $319 million judgment to the British creators of “Who Wants to Be a Millionaire.” A nine-member federal jury had awarded Celador International $269 million in 2010 after finding that Disney subsidiaries American Broadcasting Companies, Buena Vista Television and Valleycrest Productions breached a rights agreement to pay the UK company an even split of profits for the American version of the game show. U.S. District Judge Virginia Phillips in Los Angeles awarded Celador an additional $50 million in prejudgment interest for proving its claims of breach of contract and bad faith. At a hearing on Wednesday in Pasadena, ABC’s attorney, the former Solicitor General Seth Waxman, urged a three-judge panel to overturn the $260 million in license fee damages, $9 million for unauthorized deductions for merchandising income, and the prejudgment interest. Waxman argued that the judge, rather than the jury, should have made a decision based on the “expressly defined terms” of the written contract. Those terms stipulated that Celador take profits from Buena Vista instead of ABC, said Waxman, who is now a partner at WilmerHale in Washington, D.C. The lawyer also said that the court should have given more weight to the testimony of William Morris Agency representatives who negotiated the deal. In its brief, Celador accused ABC of using “classic Hollywood accounting” by taking revenues away from Buena Vista so that it looked like the show was operating at a loss. The company’s attorney, Robin Meadow with Greines, Martin, Stein & Richland, told the court that the contract provided for a 50-50 split in profits. Though Buena Vista was a party to the contract, Meadow said Celador had made its agreement to evenly split profits with ABC. Waxman called it “ridiculous” to argue that the contract dispute was all about ABC and not Buena Vista Television. Celador has also cross-appealed the dismissal of its fraud claim at trial. Judges Stephen Trott, Andrew Kleinfeld and Margaret McKeown presided over the hearing.